Hi HSB,
It appears that Office 2007 uninstalled the ActiveX control that we use to detect which version of Office is installed.
You will need to go into Control Panel | Add/Remove Programs and select Office XP. If you get a Repair option, select it and it should reinstall the control. You can also manually select "Change" and verify that the Sharepoint Services component is present as part of the install.
Good luck and let us know if this solves your issue.